AM Comments 04/20/16
Wednesday, April 20, 2016, 1:04 PM
Submitted by: Dustin Weiner
The corn market is higher this morning, one interesting piece of news was out yesterday AM about Brazil officially eliminating it’s 10% import tax on corn. While it sounds strange – yes, the US is competitive there and yes, we may end up exporting corn into Brazil. While this is viewed as friendly (and rightfully so), when you read into the details it’s really not a lot of volume, maybe… 15 million bushels or so? Our last carryout projection for this summer was 1.862 billion bushels, lopping 15 million off of that would take our carryout to 1.847 billion bushels. Again, this news is friendly but as of now I don’t see it as a game changer.
Soybeans of course were the story yesterday, up over 30c on a wild frenzy of fund buying. Overnight they opened lower, traded higher briefly and were trading lower again at the 7:45am pause. The fundamental catalyst had been wet weather in Argentina, delaying harvest. Well… it will be wet there for a few more days (as expected) but recent forecasts do show it drying out this weekend and into next week which should allow for harvest to resume. Could be a gut-check moment for the soybean market – do we take a step back here and wait for something bullish or do the (now “long-and-strong”) funds come in today and defend those long positions and continue to buy soybeans? Time will tell. No matter which way it shakes out this market has presented the U.S. producer with a heck of an opportunity to manage some risk and make some sales, both old and new crop.
Corn 1 to 2 cents higher
Soybeans 2 to 4 cents lower
Have a great day!
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